Jason Calcacanis: The Case for Seizing Apple’s Technology

August 14th, 2009

Daniel Eran Dilger

Being a CEO doesn’t necessarily mean you have a basic grasp of logic. Jason Calcacanis proved this point while trying to make a rambling critique of Apple in his personal blog, oddly republished by the Silicon Alley Insider. Calcacanis demands that Apple be stripped of its technology so that less capable and innovative companies can benefit from it instead.

To make this moralist assault on free markets more palatable, he wraps up the whole thing with emotionalist language about openness and evil. At the core however, his rant reflects the new low in moron journalism that is eating up America like a swiftly spreading flesh eating bacteria.
.Make no mistake, there are plenty of things that one could sort of justifiably criticize about Apple, ranging from a disappointment that the company does not exist primarily to create free software for the tinker community (this is expressed daily by a variety of GNU/Linux enthusiasts) to complaints that Apple hasn’t been able to keep every last one of its thousands of iPhone developers 100% ecstatic while they make loads of money selling a library of 50,000 apps hand over fist (certain pundits have made expressing this issue their full time job).However, when I choose to critique something foolish in the tech world, I have to limit myself to the most outrageously knuckle dragging and specious expressions of falsehood published by the most visible of semi-legitimate sources or I’d be stuck doing this around the clock.

In this case, the offending piece is “the Case Against Apple,” written by Mahalo.com CEO Jason Calacanis, who also credited as the co-founder of TechCrunch50.com. Calacanis complains that he loves Apple products, but they all cost so darn much that he’s over his initial enthusiasm for Apple. That idea might make a suitable Facebook status or perhaps be worth a tweet, but Calacanis seems to think it’s also enough to fill out a five item list essay, suitable for submitting to Digg. It is not.

To support his opinion, Calacanis resorts to making a series of emotion-inciting, populist arguments for what appears to be a desire for the government seizure of Apple followed by a replacement of its board and managers with the kind of “community” thinkers who haven’t been able to get us to the “year of Linux desktop” over the last decade. In a word: communism.

In the past, people usually advocated communist revolutions after losing all confidence in the existing regime to properly allocate available resources in a fair manner. A serf suffering under a imperial tzar or a laborer being exploited under outrageous working conditions might both be willing to support the idea of a populist uprising that promises to result in greater opportunity and a more level playing field.

However, we today, as a population that has witnessed multiple attempts to deliver communist states that all failed miserably, generally find the idea of a central entity seizing the assets of legal, functional, and successful private companies to be a bad idea. But Calacanis argues for this very thing, disguised under an appeal for “anti-trust action.” The problem is that legitimate anti-trust action only applies to companies that monopolize markets, fix prices, and stifle innovation.

Over the last decade, Apple has done the opposite. It forced Microsoft back to the drawing board to compete in PC operating systems and web browsers; it upset the stagnant status quo surrounding music players from Sony with the iPod and saved the world from being enslaved to a monopolized market for music and videos planned between Microsoft and the labels and studios; and with the iPhone, Apple has injected a massive dose of competitive spirit into what was a boring and slowly converging market for smartphones. All of this is simply uncontroversial. So where’s the anti-trust problem?

The first, according to Calacanis, is“Destroying MP3 player innovation through anti-competitive practices.” He complains that Apple’s iPod is so popular that most people couldn’t think of a competing brand. Yet he also complains that the iPod is overpriced and fails to offer features that other devices do.

Is this because Apple exerts a Microsoft-style lock on the market, refusing to allow other hardware makers or retailers to sell or offer competing products? That’s not the case, as any trip through WalMart or Best Buy will reveal. Apple won its success by offering a product people chose to buy, not by erecting and maintaining barriers to entry for its competitors as Microsoft did with both DOS and Windows on the PC. And nearing the iPod’s ten year anniversary, Apple continues to match or exceed the features and prices offered by its wide range of competitors, many of which are larger than Apple.

Calacanis complains that he’s seen many music players in other countries that “have TV tuners, high-end audio recorders, radio tuners, dual-headphone jacks built-in and any number of innovations that the iPod does not. You simply will not see those here because of Apple’s inexcusable lack of openness.”

Oh really? Then why haven’t these jewels outsold the iPod, here or in Japan? And is adding two headphone jacks really “innovation”? What about Apple’s side of the innovation timeline: developing a usable interface, adding headphone-integrated mics for recording, creating Nike+, adding real gaming features, and the unmatched web-browser and software platform on the iPod touch? The truth is that Apple has achieved its position in MP3 players in a very competitive playing field of much larger and more powerful and connected competitors, from Microsoft to Sony. “Openness” has nothing to do with this.

Calacanis then jumps, mid-thought, to iTunes, reviling it for not providing an API for competitors to use. “Think for a moment about what your reaction would be if Microsoft made the Zune the only MP3 player compatible with Windows,” he asks, apparently unaware that the Zune is exclusively tied to Windows and that Windows is sold, without competition, as the software platform for all generic PCs. Apple’s iTunes is not a platform, it is Apple’s music player software for iPods. Also, unlike the Zune’s software, iTunes works cross-platform.

As a solution to this non-problem, Calacanis recommends “An iTunes API which allows the attachment of any mass storage device, not just a short list of players that jumped through Apple’s hoops. If need be, perhaps consumers pay a simple licensing fee of $1-5 a unit to attach a non-Apple MP3 player to iTunes.”

Yes, no doubt the same industry that crapped its pants over Apple’s attempt to levy a $1 royalty for FireWire will be pleased to pay the company five times as much to use iTunes, further cementing Apple’s control over media sales. I know Apple would be pleased to sign them up. Perhaps Apple could collect all this money if it didn’t tell these companies that they can already copy music from iTunes simply by showing up as a USB mass storage device? I’m also sure Microsoft would be thrilled to see Apple making more per Zune than Microsoft itself does.

Note that we’re only one-fifth into Calacanis’ logical fallacy assailing Apple and it’s already obvious he doesn’t grasp much of anything in the subjects he speaks about so self-assuredly. But wait, it gets much worse, even worse than his MP3 complaint that “We are all enabling him [Steve Jobs] to be a jerk [because] we buy the products and we say nothing when our rights are stripped away.”

How about this for a free market solution: stop buying the iPod if you think you’re not getting a good deal. Unlike a monopoly like Windows, there are lots of competitive alternatives to the iPod. No, Calacanis wants to strip Apple of its products and property and distribute these to people who don’t want to pay to own them. That’s communism, and not even righteous-minded idealist communism, but simply a bail-out-the-losers ploy, along the lines of the Bush Bailouts.

What? You failed in banking? Here, take somebody else’s assets and pay yourself bonuses!
What? You can’t deliver a workable mobile platform? Here take iTunes and the iPhone from Apple, tinker, and pat yourself on the back!

Calacanis next launches into a tirade that complains that Apple and AT&T are somehow monopolizing the telecommunications market with the iPhone, despite the iPhone only commanding an 11-25% share of the smartphone market over the last few quarters. What Calacanis means to say is that Apple is the only company anyone can buy an iPhone from, and AT&T is the only provider in the US. This is not a monopoly because there is not an iPhone market.

And once again, Calacanis espouses communism by insisting that Apple’s property be take away and given to some centralized community group that could better decide how to market it and what features it should have. Perhaps the same community that failed to deliver OpenMoko or GreenPhone or various other Linux phones?

Acting as a pretend supreme soviet, Calacanis offers a “simple solution and opportunity: Not only let the iPhone work on any carrier, but put *two* SIM card slots on the iPhone and let users set which applications use which services. (Your phone could be Verizon and your browser Sprint!) Imagine having two SIM cards with 3G that were able to bond together to perform superfast uploads and downloads to YouTube.”

Never mind that only GSM providers use SIM cards (which excludes both Verizon and Sprint in the US); why would customers benefit from signing voice and data contracts from two providers? And how exactly would having multiple SIM cards make the device twice as fast? Wouldn’t you need dual radios? And two expensive data plans? And who is paying for this wildly inefficient solution, which is nearly as nutty as Mao’s plan to have Chinese peasants smelting iron in their backyards?

See, the problem with communism is that it ends up puts idiots in charge of making important decisions. In our capitalist society, if everything works out like it should, decisions are made by people who prove their competency. Companies that can’t execute are starved of resources until they go bankrupt, at least in ideal circumstances.

Calacanis hasn’t proved anything about his ability to manage platforms or sell devices. He’s the CEO of a crappy search engine powered by community input, which pays people to write articles like “How to Become a Walmart Greeter,” which somehow made it to the front page.

For his third act in arrogantly berating something that is actually the jealously envied state-of-the-art in technology, and offering in its place a simplistic solution that would cause far more problems that it would solve, Calacanis recommends Apple abandon its entire app approval process for the iPhone and instead set up something that works more like that great bastion of success that is Windows Mobile, primarily to facilitate mobile apps that offer, as he says, “something adult in nature,” because apparently the iPhone’s web-standards browser can’t pull up enough boobies by itself.

“Apple’s justification for this nonsense is that they have to protect AT&T’s network,” Calacanis says. Actually, no, that’s not Apple’s justification for wanting to own and manage iPhone software market the same way Nintendo has successfully managed software for the most popular game consoles over the past couple decades. Apple’s real motivation is survival and profitability.

Apple only talks about protecting AT&T’s network (along with every other partner provider globally) in the context of not wanting a DMCA exemption granted for bypassing the iPhone’s software signing security system. It’s not the random rejected app that threatens to brings down networks, but rather a real potential for rogue apps, liberated from Apple’s “draconian” rules.

“Aren’t there dozens and dozen [sic] of open phones on everyone’s network?,” Calacanis asks. No, there’s not. Unless by “open” you mean “unmanaged.” There’s nothing unrestrictedly open about Symbian or RIM or Windows Mobile or even Android, and especially nothing open about the majority of Linux phones, which are sold by Motorola to China, locked down tighter than the iPhone is.

“The network hasn’t crashed yet,” Calacanis insists, “and even if someone did create a malicious iPhone application, you would know EXACTLY who was running the application and be able to block and/or turn off their phone. The network was MADE to deal with these issues on a NETWORK level. To say you have to control people down to the application level defies all logic. A second year CS student understands this.”

Where does one start? How about in 1995, when Microsoft launched what would become the most parasitic attack on the Internet ever devised: a global platform of unmanaged devices that eagerly ran any app written for it, including viruses and worms designed to use the network to launch anonymous attacks. Does Calacanis really think that mobile networks are unspoofable and impossible to successfully attack? Are all those mobile and wireless radio regulations just drawn up as an unnecessary precaution? And what planet is he on if he thinks mobile networks never fail?

The simple solution this time around? Offer customers the option of “waiving your previously-understood customer service arrangement.” Maybe Ford could also include a button on the dash that disabled its cars’ seatbelt and airbag systems as a convenience to drivers who didn’t want to be inconvenienced, and attempt to shirk all accountability by adding similar wording in the car’s EULA. I’m sure nobody would sue after actually having an accident.

Calacanis next claims Opera set out to develop its own web browser for the iPhone but was stymied by the iPhone 2.0 restrictions. This isn’t true. Opera develops web browsers for platforms that ship with an unusable trash browser, such as phones with BlackBerry OS or Windows Mobile. Nobody would trade Mobile Safari for Opera, let alone pay for it, so Opera never seriously considered shipping a browser for the iPhone.

“What Apple is doing is 100x worse than what Microsoft did [when it bundled Internet Explorer with Windows]” Calacanis says. Except that it isn’t comparable. Microsoft represented Windows to developers as an open platform, then yanked that premise out from under them, repeatedly. That began with WordPerfect and Lotus 123 and continued over and over until Microsoft identified Netscape as a successful opportunity to steamroll.

Apple never represented the iPhone as an unrestricted platform. From the beginning, Apple outlined exactly what it would allow and what it wouldn’t. The company indicated the iPhone’s web platform itself would be open to anything standards-compliant, but that native apps would have to be approved and align with Apple’s restrictions, including limits on content, bandwidth, and even style. No developers can complain that Apple blindsided them after first suggesting that the iPhone would be as unrestricted and unmanaged as Windows, because Apple never did. There is no hypocrisy here.

Once Apple reaches a threshold where the iPhone becomes the dominant mobile computing platform and barriers to entry into the smartphone market become excessively high so as to prevent any potential for competition, then the issue of Apple’s app restrictions might become an anti-trust problem. Until Apple achieves global domination, which is not likely, let’s worry about why Opera is the only browser available for the Wii. Oh, now that’s hypocrisy.

AT&T issued a statement saying that it doesn’t veto individual apps, and an investigation is underway to determine whether the action was a product decision by Apple or a situation pressured by AT&T to prevent competition from occurring in the mobile VoIP space. While there are still some unknowns, it is clear that Calacanis’ take is simply wrong when he says “This point is similar to the browser issue, in that Apple wants to own almost every extension of the iPhone platform.”

First off, there’s nothing wrong with Apple seeking to own its own product and platform; secondly, there is no similarity with browsers because Apple didn’t replace Google Voice with its own bundled app to take over the VoIP service business after finding it potentially profitable; and thirdly, its just another non sequitur in a series of demands for public ownership of Apple.

The simpleton solution offered in this case: “simply stop being jerks and let the free market decide how to use the data services they’ve BOUGHT AND PAID FOR. That’s the joke of this: you’re paying for the data services that Apple is blocking. You pay for the bandwidth and Apple doesn’t let you use it because, you know, they know better than you how you should consume your data minutes.”

Actually no, iPhone users are not paying for units of data like commodity boxes. We’re licensing use of AT&T’s network, subject to the terms of that license. This is the same with any other mobile provider or Internet service provider. Again, Calacanis insists that Apple can’t position its product as it sees fit, and should therefore have the iPhone taken away and its intellectual property given to those who would like to use it as they see fit. He fails to understand even basic concepts of the mobile industry and how network service providers work.

True, it’s fun to play couch-communist as Calacanis does, insisting that companies should give away their products for you to try first, or insisting that some aspect of their business model should be changed. It’s fine for Calacanis to express his opinions, however poorly informed they may be. And they are very poorly informed, with little understanding of how technology works and clearly even less incisive about how businesses and laws and contracts work.

But it’s another ball of wax to insist that Apple should be taken over and its management replaced by a supreme soviet of open source wonks that prance around handing out free gifts to users while competitors seek to destroy the company using more predatory and closed products than Apple itself, and positioning the whole tirade as a moral high ground.

Does Calacanis seriously think Apple has some impossible hold over the tech industry the way Microsoft has since the late 80s? There is vibrant competition in smartphones, not in spite of Apple’s unique innovations, but because of it. Calacanis cites fellow complainers, including TechCrunch’s Michael Arrington and Engadget’s Peter Rojas, both of whom have vocally given up the iPhone for similarly ideological reasons. Which is fine, as long as their competitor-supported theatrics are seen as such and not portrayed as some moral high ground related to real issues.

While Calacanis doesn’t point it out, both men are his business associates. Arrington was also implicated in the “People Ready” scandal, where Microsoft paid bloggers to inject ads into their “opinions,” and Engadget certainly makes more money talking about the scores of hardware sold by Apple’s competitors than about Apple’s iPhone. It’s not exactly shocking to see both figurehead bloggers talking populist smack about the iPhone to curry favor from their advertisers.

“Apple will face a user revolt in the coming years based upon Microsoft, Google and other yet-to-be-formed companies, undercutting their core markets with cheap, stable and open devices,” Calacanis predicts, apparently unaware that Microsoft and Google both brutally monopolize their respective markets and work hard to block competition. Sure, they’re both willing to be open in areas where they make no money, as is Apple, which will freely offer you the Darwin OS, Darwin Streaming Server, WebKit, and lots of other open projects because such altruism has no downside.

Does Microsoft offer any “openness” in areas it wants to own? Does Google offer open access to its crown jewels? Send me the source code to Caffeine if you can. No, Google is only open in areas where, like Apple, it makes more sense to offer free incentives than to try to charge for it, things like access to its Maps APIs or use of Gears or the whole please-use-Android so we can sell ads on your mobiles thing.

Google’s complete lack of interest in putting any work into creating a viable marketplace for Android apps that safeguards users’ security may be spun as a win for open source ideologues, but it is not done in the interest of consumers; it’s only because Google wants to roll out Android as cheaply as possible, just like Microsoft’s half-assed approach to blowing out Windows as cheaply as possible as an unfinished product with no security back in the 90s.

It’s time for couch-communists like Calacanis to go back to school and realize that “openness” isn’t something companies can be forced to do. Companies will only do what is in their best interests. Companies like Apple, Google, IBM, and Sun and have all demonstrated that the use of open source and open standards can be a competitive advantage in some cases. However, it’s simply moronic to suggest that the more one gives away, the better things get, or that rushing to give away all your intellectual property is some mark of “not being evil.”

Apple’s phenomenal success over the last decade has come from knowing what to open and what to keep closed. Had Apple opened the iPod up to third party software and accessories back in 2003, it would have been saddled with a lot of very limited apps and gadgets that it would have needed to kill off to make way for the iPhone and iPod touch, or alternatively, be forced to drag along in a long tail of extended support, the very problem Microsoft faces with its “always backwardly compatible” Windows strategy.

Instead, Apple’s limited platform of providing simple games on color iPods demonstrated a successful model that the company expanded upon with the iPhone. Had the iPod been wide open, the tinker community might have ported over an unfinished version of Tux Racer, but Apple would not have been better equipped to compete against other vendors. Were the iPhone and iPod touch plagued by a sea of garbage apps unfettered by Apple’s own quality control, the company’s mobile platform would be stuck in the same rut as Windows Mobile, where everything looks like crap.

And to all those naysayers who insist that many of the apps in the iPhone app store are not worth their 99 cent price, image the signal to noise ratio if Apple weren’t holding back the floodgates of trash. Actually, no need to imagine, just rummage through any of the mobile app stores run by competitors.

A wide open iPhone would also face the same confusing array of store options as Symbian or Windows Mobile, apps would be much higher priced due to widespread piracy, and developers would have no special reason to develop for the iPhone, just like they have no particular incentive to develop anything interesting for other mobile platforms where vendors haven’t bothered to actually build a workable software model.

Recall that Apple was devastated in the early 90s by a mass defection of its software developers, led by Microsoft (the company Apple launched into the desktop application business; before the Mac, Microsoft could only manage to profit from BASIC and DOS).

Imagine if Apple had instead been able to sell Macs like iPhones, and then had delivered a software model where Mac apps were all $40 rather than $400 (as all the big apps were back in the day) due to piracy-limiting DRM. Imagine if this model could have eliminated virus transmissions and launched a sustainable development model that created a wide variety of reasonably priced software.

That’s a lot to imagine, but had the company known how to pull it off, the computers of the 90s would have been a lot smarter and better looking, and hardware makers like Apple would not have been ripped off by software cloners like Microsoft. Actually, we don’t have to imagine anything; this is exactly how Nintendo held onto its gaming empire through generations of consoles and handhelds.

Is the Nintendo Wii and DS, the Sony PlayStation, or Microsoft’s Xbox “evil” in the mind of Calacanis for not allowing third party software that isn’t properly approved and licensed? Does Calacanis also realize that there have been lots of “open community” attempts to deliver game consoles, all of which have failed miserably?

The iPhone is an example of how Nintendo’s closed, managed software model can work to raise quality standards and lower piracy (Nintendo pockets the savings, while Apple chooses to instead incentivize lower software prices and therefore generate greater sales volumes).

Many people, particularly people who like to talk loud and authoritatively, like to bark about how this is bad and that Apple should adopt an Android or Palm OS/WebOS or Windows Mobile-like software model, apparently unaware that those models have all either already failed or are completely unproven (in the case of Android, consider the case of Andre Torrez, who decided to blog about switching from the iPhone to the Android G1 “Google phone” for a month, only to give up completely after a week of trying).

And Mr. Calacanis, after supporting the Microsoft monopoly for all these years, calling Apple “hypocritical” for playing within the rules of a game defined by Microsoft really just makes you the hypocrite. Perhaps you should prepare for a career that suits you better; I know a site where you can read up on being a Walmart greeter.

I think that an overlooked reason why Calcanis & Co. are heard loud and clear all of the internets is that their ideas are so simple that they can easily be regurgitated on podcasts even after a few drinks. Yes, TUAW, I’m looking at you. There is neither any analysis of whether the logic holds up or nor any historical background check.

worker201

I don’t think the communism angle was really necessary. It’s obvious that Calcanis is just jealous of Apple’s product design and market success. There’s no reason why Microsoft or Motorola or Verizon or whomever couldn’t make products that outperform and outcompete Apple – and yet they don’t. I’ve always assumed it’s because those companies are spineless and inflexible. But a paid shill can’t talk about his backers like that.

Truth is, even if Apple took all his suggestions, the rest of the market still couldn’t put together a consumer product that people would love. If Calcanis doesn’t realize this, it’s because he’s paid to not realize it.

http://www.lowededwookie.com lowededwookie

I don’t want to be a douche here but your continual bashing of communism in favour of capitalism gets a bit old. Capitalism has done nothing to favour innovation and if you look at Apple it has more to do with communism than capitalism.

Think about it, Apple controls the software and hardware for the greater good of the collective user experience. Communism does the same… at least that’s its intent it’s just that most communist nations have had dicks running them.

You often lambast socialism as well but when New Zealand was a socialist nation. They owned the infrastructure and as a result had the world’s greatest telecommunications network due to being the perfect testbed for new technologies because it was large enough to provide reliable test results but small enough to roll back quickly if something went wrong. They had cheap power, gas, and petrol, and they were world leaders… hell we flew 9 months before the Wright Brothers and we split the atom, and we invented the Lamborghini Countach. Now we’ve moved to a capitalist nation in mirror of the US we rate poorly on the OECD list of telecommunications, get raped by overseas companies, and have a high level of crime and unemployment.

Most capitalist based companies claim huge profits and yet they do nothing to earn them. Look at the oil companies look at Microsoft. You claim that communism puts idiots in charge to make the decision and yet capitalism does the exact same… Bush, Ballmer, the list goes on.

Apple controls and as a result it innovates and rakes in the money.

I don’t agree Apple should lose its rights to its properties and I think this writer is just as much a dick as the other journalists but to say communism is bad and evil and praise capitalism when that’s done more to destroy society than any other regime is ludicrous at best.

humann

typo needs fixing second paragraph first line: palatable

http://blog.cytv.com cy_starkman

I’m going to call BS on the Google Voice carry on around the traps, or the idea that Apple is about to do same so is blocking competition.

The one time that DID happen was last year with some dev’s podcast streamer which Apple was about to release. The dev got a letter saying as much.

In 3.0 Apple released a voice memo app, didn’t see no pulling of all the voice memo apps. They all continued along happy as. Equally Apple hasn’t junked all the camera apps because it has one.

Browsers yes, but it’s such an obvious vector for attack and Apple never said browsers were a go anyway. also if u default to a different page renderer how does that work with apps that call the browser and then have a mystery API to deal with and the user gets confusion. You can still make ur own browser, so long as it is webkit based… The issue is?

Finally the last few blog explosions, namely a dictionary and an ebook reader… Which concluded with sensation grabbing claims by a few big names about dumping iPhone; and a flurry of Apple is killing eBook readers because the fabled itablet and mystery cocktail will provide that feature. Bull….

As has now come out with no retraction by said headline grabbers both apps had reasons for bring pulled. The ebook reader shared content via Bluetooth, an obvious copyright issue and the dictionary was submitted prior to parental controls and decided not to wait.

So far the only app that really had something to fire everyone up over was the podcast one and no one gave a shit.

http://jonnytilney.com Jon T

What a great essay, thanks again Dan.

I have been so outraged, byt he faux outrage and misinformation flowing about the iPhone just at the moment, that I feared I might blow a gasket. This article restores my faith in logic and reason prevailing.

And to the posters about communism, I think Dan is right, these jokers want a redistribution of talent, because Apple clearly has a surfeit.. What an accolade to Apple!

macsmarts

So damn insightful, so damn Dilger. Reading you is like watching that Honda ‘cog’ ad where the disassembled car performs a beautiful ballet, one part activating the next and the next until, the completed car rolls from the ramp.

I’m convinced that of 1000 bloggers, you’re the only one who does more than 5 minutes of research or thought.

You Sir, are the anti-Leo.

hurtle

Maybe Apple restricted web browser apps before, but at the moment I count over 30 web browsers in the app store, see for yourself, in iTunes do a power search in”Applications” for “web browser”. . .

Lee

“The problem is that legitimate anti-trust action only applies to companies that monopolize markets, fix prices, and stifle innovation.”

It depends how you define “anti-trust action”. I can think of cases where none of these are true, yet heavy regulation or nationalization would be the proper option. For example, three telecom providers that aren’t fixing prices or stifling innovation, but which could in certain circumstances be replaced by a publicly owned service that would do a better job at a cheaper price. I realize this sort of thing is verboten in the US, but you guys have a completely warped view of social democracy.

This is generally an excellent blog, but when the word “communism” is used it tends to be used in the way it is in the writings of the Ayn Rand cult. I’d be more sympathetic if cases were treated on their own merits.

Having said that, Calcacanis is completely out to lunch, since portable electronics is, for various reasons, the absolute worst candidate for nationalization or heavy regulation.

I love Lee’s “certain circumstances” that he can imagine in which three competitive (why three?) private telecomm providers “could be replaced by a publicly owned service that would do a better job at a cheaper price.” Yeah, I can imagine those too: In a world where government enterprises have the same incentives as private enterprises and in which there are no commons tragedies and no public choice matters and… well, of course, that is not the world of scarce resources with alternative uses and distributed knowledge, which can only allocate resources efficiently in private hands. So Lee, your world is a fantasy, and if you have ever noticed the quality of government monopoly phone systems, they blow even worse than our old system of private but government-regulated monopoly. Yeah, we have a completely warped view of social democracy. Like, the concept is nonsensical and leads to inefficient economies. “Communism” doesn’t have to be treated in each pseudo-new brainstorm as a new case that no one has ever thought of before; their own merits are actually covered by the general principles that will obtain even if someone has an idea how they will not (the idea always being just ignoring the principles).

http://home.comcast.net/~daguy daGUY

Good point about Nintendo – game consoles work pretty much the same way as Apple’s iPhone platform, yet I don’t see anyone complaining about Nintendo being “anti-competitive” or how they should make the Wii more “open”.

Calacanis’ second point about having the iPhone use two SIM cards as a “simple” alternative to carrier exclusivity is insane. First, Apple would have to add two cell radios for the different networks, which would take up more internal space, forcing them to either change the iPhone’s form factor or cut other features out to compensate. Second, having two cell radios constantly connected would suck up double the battery power (and people already complain the battery doesn’t last long enough!). Third, customers would have to pay for two separate data plans! If you think people would be willing to do that, try to find someone who has TWO personal cellphones. It’s the same thing.

It’s not like Apple invented carrier exclusivity anyway – that practice has been in place for a long time, way before the iPhone was even announced. It’s unfortunate, but he acts like Apple created it, which isn’t even close to true.

rpomeroy

Thanks Daniel. Eviscerating this freetard was the moral thing to do. Note: I’m currently reading Atlas Shrugged and it’s like life imitating art
:-).

afindlay

An anti-trust investigation does not equal a call for a government seizure of a company in any way, shape or form. And the irony present in your response to this article being couched in an emotion-inciting populist argument against a perceived call for communism, is almost suffocating.

Also, I would generally agree with lowededwookie’s points about the perception of socialism and communism in the US. The sad thing is that the ideology of socialism = bad, capitalism = good (despite any evidence to the contrary that comes from the innumerable times companies have put profits ahead of people, even to the point that it costs people their lives) is so embedded in the States that it seems to be utterly impossible for people to even debate the points surrounding it and come to their own conclusions.

http://wanderbook.com eddieclay

Grreat post again. I am a long time reader, first time commenter.
I am hoping you can dig more into this “Blocking the Google Voice Application on the iPhone” which seems to be the match that lit all this fire. It just doesn’t make sense. If AT&T is the evil reason behind this, why is Skype and FreeMMS allowed?

No one seems to be pointing out that Google used private APIs and possibly linked to private frameworks before, isn’t it possible they went overboard on their latest submission?

On the subject of anti-trust: Where is the evidence that Apple is seeking to smother alternative innovation and competition (legally or illegally) by forcing their API’s upon an entire product space and industry?

Ok, developers have no access to the phone call experience through public APIs. Apple has their reasons for this, and sure, developer’s have their reasons for wanting it. But asnyou said there is ” nothing wrong with Apple seeking to own its own product and platform”.

Ok, you won’t ever see Job’s on jumping up and down on stage yelling “developers, developers, developers…” and Win Mobile or Android may be a more flexible platform as an alternative for building different products. At least their are alternatives, phone-wise, that is. The real problem is lack of alternatives network-wise.

Raymond

Thanks Dan for another great article.

The sad state of affairs is that Calcacanis’s views are far from scarce. I’ve almost stopped reading slashdot & digg as people have a runaway sense of entitlement. However in recent weeks the number of opinion pieces and articles against apple has increased dramatically. Apple’s success has angered a lot of people from competitors who were happy pushing out slight modifications of their old handsets each year to open source zealots who expected to be heirs to the throne.

With medical science advancing so quickly, I may yet live to see the year of Linux on the desktop.

Maniac

Great article Daniel, as always. It seems like Calacanis is trying to become the new John Dvorak. Traffic is traffic, whether it’s generated by intelligent content or blatant click-baiting.

As for Linux? Well, there’s a reason why Sony is still around but Heathkit isn’t.

Dorotea

BTW, Skype only works over wi-fi in U.S. – not over the AT&T network.

http://wanderbook.com eddieclay

AT&T prevents Skype from working over 3G, that is true, and I guess Skype chose to play along with the rules. Perhaps Google didn’t.

Again, this is not an Apple issue ( I’ll bet Apple is secretly on Google’s side here).

To quote AT&T’s top public policy executive, “We absolutely expect our vendors” — Apple, in this case — “not to facilitate the services of our competitors,”

This battle has all been pre planned. Google will press forward now by making the pure Web app. That will be interesting. Apple can now say there is nothing we can do about that.

AT&T -is a phone company, so you can’t fault them for trying to save they’re good old lucrative phone network model, but they (and all the other phone companies) will eventually lose this battle. One way or the other, the internet, and the consumer are going to win.

bartfat

I don’t really have any beef with Apple, in fact, they seem to do doing everything they can to promote their innovations without upsetting their business partners. And yes, there are more “analysts” who probably ended up there simply because they couldn’t find a job elsewhere, like Dvorak and this guy.

[QUOTE]originally quoted by eddieclay:

AT&T -is a phone company, so you can’t fault them for trying to save they’re good old lucrative phone network model, but they (and all the other phone companies) will eventually lose this battle. One way or the other, the internet, and the consumer are going to win.[/QUOTE]

I completely agree this is the case, Apple is more or less being forced by some company that sees the potential for shrinking profits due to disruptive technology that completely undercuts their business model. They’re soon going to become a pipe for getting and sending data and voice and that’s what they hate. Not being able to “value-add” services like text messaging (which should be free, b/c it actually doesn’t cost carriers anything to send them, unlike regular voice calls) and rob people of their savings if they ever call international.

bonze

Well, I regret having wasted some time reading TFA and the comments to it… Calcacanis is bad enough, some of the comments after his post are BatS*** Insane.

It’s really ironic that 12 years ago the adjective “beleaguered” invariably preceded “Apple Computer”, and now these fools want to affix the label “anti-competitive”… because Apple’s now successful in making money with a small market share (outside of MP3 players, at least).

But actually Calcacanis does rack up the high score in the insanity department by comparing Apple with Ma Bell. “Apple’s iPhone is a revolutionary product that has devolved almost all of the progress made in cracking–wait for it–AT&T’s monoply in the ’70s and ’80s. We broke up the Bell Phone only to have it put back together by the iPhone.” Riiiight… nowadays you can’t make a cell call without an iPhone. Wait for it–the guy with the straightjacket is on his way!

Is he actually old enough to remember the days when you couldn’t attach an answering machine or third-party handset to your phone line because it was not manufactured by Western Electric and leased from Bell? Surely he can’t be!

I tried to find out how old he is… but Google just yields reference after reference to THIS post… :->

http://blog.cytv.com cy_starkman

@Bartfat

agreed, the carriers are clawing at a sea of ants and are on the verge of being made into a commodity.

One thing, there is no voice And data pipe. It’s all data and the variable bit rate pricing for different headers on strings of 101 needs a take down. Imagine if ur ISP charged different rates if the header was an email or a video or a webpage. An SMS is 160 ASCII extended characters. No more than 320 bytes plus header, maybe 500 bytes total; we are being charged 25c (nation dependant) for that, 50c / kb and there is what 1000kb in a Mb, $500 / mb of data! They are the ultimate bottled water sellers.

stefn

Communism? Or fascism? I think of the fascist impulse as the will to power at the expense of truth. Much like those Republicans showing up at townhall meetings these days accusing Democrats of passing out pills for killing off granny. Isn’t this Calacanis’s great wish also: accruing interest using BS?

even

@lowededwookie @afindlay @Lee

Capitalism is the only model for society that does not require the use of violence. Communism, socialism, democracy, royalism, etc. are all statism, all based on the idea of people giving up (willingly or not) part of their property to the state. In communism you give up everything you have, in democracy you get to keep some of it. The state (The King or The Party or The Government) is supposed to know best what to do with the loot. Statism can last only as long as people can be made to believe that there is no better way, which is why so much effort goes into making sure you never dare to think for yourself, lest you find out the truth about capitalism.

The USA is less capitalist now than it was in the past 2 centuries, but as more people begin to understand how much better off they would be in a truly capitalist society, as they realize that capitalism means freedom, progress, responsibility, efficiency, honesty, science, imagination, the end of waste and pollution, and the end of wars, the future starts to look good again. Ayn Rand’s novels are a good introduction to capitalism, then you’ll be ready for Morris and Linda Tannehill’s The Market for Liberty (free pdf and audiobook on the net).

stefn

Well, this is getting way off topic. But Daniel opened the door, yes?

Capitalism without democracy? Isn’t that the way of life in every despotic nation in the world?

Capitalism without government? Isn’t that anarchism? Which is what a lot of Republicans espouse without admitting or even knowing it? (“Government is the problem…”)

Capitalism as government? Isn’t that what a plutocracy or an oligarchy is? As in Russia?

Not capitalistic enough? Here’s the truth as I know it: The US is in fact a plutocracy that functions as a democracy only occasionally.

even

@stefn

Sigh. Capitalism is when you are free to keep your property and/or trade it with any willing person, i.e. when all legal interactions between people are strictly voluntary. No one has a right to take anything from you by force or threat of force, as in taxation.

You can’t have capitalism and democracy together, it’s one or the other. And if a nation is despotic then again people are not free so it’s not capitalism. Anarchism only specifies an absence of leaders, you still need to explain how it would work. When you have capitalism you are as free as in anarchism but you also have property rights and the automatic regulation of the free market. “Capitalism as government”? What does that even mean? Is it so hard to read up a little? It would help you clear your mind of such ignorant and confused nonsense.

stefn

@even
I’m guessing you must be about fourteen years old, from the fact that you see no reason to identify any form of government to ally with capitalism. In the heyday of the Republican reformation in the eighties the very best of their thinkers saw the need to refer to their cause as democratic capitalism. Or is it that you think capitalism is a form of government? Or that you think that no government is required? Sigh.

crackpip

@even

Your definition of capitalism has an inherent contradiction when you mention “legal interactions”. You make of how legal is defined nor how legal interactions would be arbitrated and enforced.

On a more general level, the type of capitalism you seem to be advocating is basically a conceit. Like Marx before her, Rand’s ideas require a standard in human behavior that is far from reality. This combined with the inherent instability associated with unregulated capitalism (e.g. the trend toward consolidation and wealth and power concentration) makes what you’ve discussed fit only for small groups of individuals. It is untenable for anything larger.

crackpip

P.S. You responded to a critique of your ideas (i.e. not a personal criticism) with an ad hominem attack, this is not an ideal espoused in objectivism. Might I recommend that in your search to attain rational self-interest you listen to critics and avoid becoming dogmatic.

afindlay

@even

The idea that capitalism is the only model for society that does not require violence is a gross simplification at best. There is regularly state supported violence in capitalist societies, usually with the justification of protecting private property. Just look at the G20 protests in London earlier this year.

There is also the argument put forward in The Spirit Level (which I have to admit I have not read as yet, but I have read an article summing up the main points) that the more unequal a society is, the more problems you find in that society, everything from teenage birth rates to high levels of obesity and crime are far more prevalent in unequal societies than in equal ones.

Whilst I would not argue for a full on communist system, I do feel that unbridled capitalism tends to work well for those who are lucky enough to be born into a position of wealth or power, but not so well for those who aren’t. What we currently have is a situation with a widening gap between rich and poor, and falling levels of social mobility in both Britain and the US, as the rich use their power and influence to paint anything that goes against their interests as ‘socialist’, and having undue influence over decision making. A perfect example can be seen in the healthcare debates in America, with insurance companies trying to skew the argument into one about ‘freedom’ and ‘democracy’, when in reality they’re just trying to protect their own bottom lines. Sadly, they’ve got so much money to spread misinformation that they actually seem to be convincing the American public that something that should be as uncontroversial as making sure that everyone has access to decent medical services is somehow evil. It’s terrifying.

http://wanderbook.com eddieclay

“History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition.”

“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”

“So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible?”

“The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that’s why it’s so essential to preserving individual freedom.”

“Most economic fallacies derive – from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

“Underlying most arguments against the free market is a lack of belief in freedom itself.”

“The most important single central fact about a free market is that no exchange takes place unless both parties benefit.”

“Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”

From “Free To Choose” by Milton Friedman.

http://www.lowededwookie.com lowededwookie

@even,

The problem with Capitalism is that it gives the false idea that you own what you have. This is complete and utter bull and anyone who believes that this is the case is extremely narrow-minded.

Considering most people do not own their home freehold and instead have large mortgages the idea they own their home is a fallacy as until that mortgage is paid off the bank owns the property and can do with it what they want.

Add to the fact that the land you own only goes so deep and the local council and by proxy the government owns the rest means that if the government decides that they want to dig a cavern under their house they are by all rights entitled to do so and there’s nothing you can do to stop them.

So what we have is communism, socialism, and monarchies are outwardly and honest in their structure in such a way that we know that we have very few personal freedoms in favour of the good of the people. Any nation that looks after the people will have a freedom to do more than one where the people have this sense of ownership that actually does not exist.

Democracy is the biggest fallacy there is. Democracy’s idea is that the people have the say. So if the people want something to happen why does the government do the complete opposite? It’s because no democratic nation actually follows the rules of democracy. A true democracy would have representatives of all aspects of society working together for the good of the nation instead of politicians who only have their own personal agenda to look out for.

Democracy can’t work because there’s only a 4 year window in which things can get done. The only democratic nation that seems to work is Sweden and that’s because they change parts of the government not the whole lot so anything that doesn’t work gets replaced.

Capitalism just makes everything worse. It promotes a “me first” attitude and so as society begins to only look out for itself and indulges itself society collapses.

Eddie Izzard made a statement about America that was 100% the complete truth… “America is the new Rome”.

Rome was never conquered. It’s the only world power that was never taken over. It ceased to exist because the family structure fell apart because people were only concerned about themselves and no one else. Once the family structure broke apart society could not remain intact and so Rome splintered itself which led to the current Anglo-American world power. Now America is following the example of Rome and it’s plain for the world to see.

Communism isn’t about the government deciding that it’s going to take your car to use while they’re visiting your city or whatever although they do have the power to do that – incidentally so does a capitalist nation. Communism is all about keeping society together and busy so that the nation remains vibrant and strong. Keep the family unit intact and you keep society intact.

America really knows nothing about government because they’ve been spewed a bunch of rot in school making it seem as though their nation’s democratic and capitalistic way of life is the only way to live and anything else is evil. Truth is capitalism is the real evil. It’s done nothing to better the world and only provides a false sense of security and a false sense of happiness. In reality it keeps people on edge, it forces people to work stupid hours just to pay for their “way of life” which means less time with the family, more stress, and more sickness. How is that good?

http://wanderbook.com eddieclay

I am sorry I didn’t read your 5 -10 paragraph reply. I am still cracking up over your first one re: New Zealand how socialism brought air-flight to the masses….dude, its too easy to google this.

stefn

I didn’t think I would have to hear from Milton Friedman and Ayn Rand in my remaining lifetime.

These are the folks whose thinking delivered the continuing and perhaps permanent destruction of our economy in the last year.

Even Rand’s famous acolyte Alan Greenspan is out there this year advocating the nationalization of banks, for goodness sakes.

Stupidity knows no shame I guess.

even

@afindlay @lowededwookie

Capitalism does not exist anywhere on the planet now, and probably never has. What you call capitalism is not the real thing. Put aside what you think you know and read Market for Liberty.

@eddieclay

Friedman is mostly right, except “Clearly it is not a sufficient condition.” It is, if you carry the idea of individual property to its logical conclusions. Again, read Market for Liberty.

@stefn

Your mind is paralyzed, by fear alone. But really, you have nothing to fear, because, what have you got to lose? Do something nice for yourself today, enjoy yourself!

[ When you say “Capitalism does not exist anywhere on the planet now, and probably never has” you sound a lot like idealists who say “Communism does not exist anywhere on the planet now, and probably never has.” That’s a cue that the fantasy you hope will work actually does not, so in the real world things are modified to the point where it is no longer a fantasy and simply an imperfect reality. You must be under 30. Wait, reality will dump on you like a load of brinks shortly. Faster, if you give up reading Ann Rand. – Dan]

stefn

@even
See you on the post office wall … with all the other delusionists.

afindlay

Putting aside the argument about whether or not capitalism does now or ever has truly existed (I’m afraid I don’t have time to read Market For Liberty at the moment, perhaps a summing up of the pertinent arguments may be in order even?), I came across an interesting set of statistics the other day in the Guardian on the differences between the British (socialised) and American (free market, or as near as) healthcare systems. I can’t find a link, and I’m rounding my figures slightly here, but the gist was that healthcare in America costs twice as much as it does in the UK as a percentage of GDP (just over 16% as oppose to just over 8%), but average life expectancy is slightly higher in the UK (77 years as opposed to 78, although quite what effect the US gun laws have on that figure is a debate for another time), and here in the UK we have a significantly lower infant mortality rate (6 deaths per 1000 births instead of 9).

The suggestion that private enterprise is inherently more efficient than state control would appear to be somewhat undermined by these figures.

SteveS

@Worker201
Your comment which suggests there is no reason why Microsoft, Motorola, Verizon, etc. couldn’t make a product that competes better than Apple is a bit naive. You make it sound as if it is a conscious decision to put out inferior products. To that, I suggest to you that very few companies are capable of innovation. Those that are capable typically have that capability in either hardware or software, but not both. Motorola is capable of designing cool hardware (like the razor), but is incapable of developing innovative software. Microsoft is not capable of developing anything that is not extremely derivative of existing work. Verizon is a network and does networking well, but that doesn’t mean they are capable of developing an operating system much less the hardware to run on it. Similarly, the success of the iPod wasn’t due to any one specific thing. It was a combination of great hardware and great software (iTunes, etc.) which put (and continues to put) Apple in a league of their own.

@lowededwookie,
While I agree that politics should be kept out of technical discussions, your comment which states that capitalism does nothing for innovation is just bizarre. Capitalism promotes competition which in turn promotes innovation. If you wish to debate this, then I challenge you to compare and contrast the innovations coming from Communist countries as compared to Capitalist countries. The results will speak for themselves.

http://wanderbook.com eddieclay

Yes, I agree, mixing the name of Greenspan with Friedman and Rand’s does prove “Stupidity knows no shame I guess.”

even

@afindlay

You don’t have to read it, just get the audiobook. It’s a free download, search for “market for liberty audiobook”.

@Dan

So, transposing your argument to computers, you assert that just because a cool net-enabled tablet has probably never existed on the planet before, it is a cue that Apple will never succeed in making one?

Dan, your assumptions are the result of your 30 years of being subjected to non-stop statist propaganda. You know better than to believe what everyone says about technology: with a 10th of those reasoning skills you can work your way out of these assumptions, if you are careful to start your re-examination at the very beginning, from basic facts. Ayn Rand was right about that, even if she was wrong about a few other things like the necessity of being governed. The depressing “reality” that’s been dumped on you can be shaken off, it’s a beautiful world beyond the bricks that are boxing you in.

http://www.lowededwookie.com lowededwookie

@eddieclay

If you want to check out who flew first do a Google search for Richard Pearse.

He flew 9 months before the Wright Brothers and flew twice as far. However he humbly conceded the title to the Wright brothers on account of the fact he deemed his crashing into a boxthorn hedge a failed flight despite the fact he clearly flew.

You may want to actually do SOME research before mouthing off like the ill-informed idiot that you come across as being.

http://www.lowededwookie.com lowededwookie

@SteveS

I disagree. Why is there so much patent disputes that locks the development of technology?

Sure trying to protect your ideas seems like a good thing but the reality is that when disputing patents you in fact halt the progress of technology.

If a communistic approach to technology was in place then technology can progress because ideas and processes are open to the masses to do with as they will.

The capitalist approach locks everything up in litigation to thwart those using said ideas and processes and try and milk money from them thus effectively killing off new technologies.

Tell me which idea actually does the world more good? There is tonnes of anecdotal evidence to see how much effort the oil companies have put in killing off technologies that would see the world removing any reliance on oil. Because of this we are relying on trying to get the best out of 200 year old technology. If there was no money to be made in oil do you think that that would still be the case?

http://wanderbook.com eddieclay

@lowededwookie
I didn’t mean to disrespect your local hero, by all accounts he was a great man. Along with Pearse there were about 9 other possible first time flyers as well. Google “Percy Pilcher” if you want. However, the funny thing about this is how it relates to the gist of this thread. The Wrights were very entrepreneur oriented, they were in this for the money, they were bloody capitalists. They were extremely protective of what they were doing, and made their first public flight in 1903, but had been flying years prior (hundreds in 1901). Who actually flew first is a legitimate controversy, like the invnetion of the telephone, but even Pearse did not claim this thrown as you say. The point is however, the airplane as simply an invention means very little unless someone brings it to the market. To keep from going on too much of a tangent, let’s relate this to the GUI, a lot of researchers and scientists can claim they invented it, Apple brought it to the masses.

http://wanderbook.com eddieclay

Oops my bad, reading Orville’s autobiography, that first secret flight was indeed Dec 17 1903, the famous picture was from a camera he actually set up himself. Also the hundreds of flights prior were manless. Still, they the own the throne (or the “thrown” word corrector likes to say).